With starbucks on nearly every corner of nearly every city in
America, the once-percolating coffeehouse trend has simmered down
and become a staple of American culture. But savvy entrepreneurs
have found a way to add a new ingredient to the industry:
drive-thru coffeehouses.

In an effort to speed up the daily grind for
caffeine-dependent consumers, drive-thru stands are popping up
all over the country. Jeff Titterington and Mike Rippey, both 50,
own 27 drive-thru Caffino outlets in California and Chicago, the
first of which opened in 1993 in Napa, California. "No one
else was doing it back then," says Titterington, who came up
with the Caffino concept after seeing a number of coffee carts on a
trip to the Pacific Northwest. "I thought we could do the same
thing but on a more professional level."

Northern California residents took to the drive-thru concept
immediately, and soon, some 500 customers a day were whizzing
through the Caffino location to get their daily jolt. Within a
year, the Caffino team had opened another store and have averaged
six new stores each year since. Caffino's 27 shops brought in
$13 million last year--an average of a little less than $500,000
per store.

Frances Huffman, a freelance writer in Pacific Palisades,
California, is a former senior editor for Entrepreneur.

Heating Up

Titterington and Rippey aren't the only ones who have caught
on to the latest coffee craze. Ken Woods, 41, and Mark Garrett, 42,
opened Gotta Java in Pasadena, California, last April--and
they've already noticed potential competitors lurking around.
"I've caught people outside at 8 p.m. taking photos and
using a tape measure to get the dimensions of the structure,"
Woods says. "But I can't get too mad because that's
exactly what I did three years ago. Only I waited until 11 p.m.
when nobody was there."

What's luring potential competitors is the notion that a
tiny structure and simple menu must mean low overhead and big
profit margins. In reality, the recipe isn't quite that
simple.

"It's a heck of a lot of work," says Woods.
"It's really hands-on. I'm [at the business] all the
time." And Woods isn't just talking about the daily
duties, which he and Garrett share with eight employees. He's
also referring to the three years of research he conducted before
taking the plunge. Gotta Java's pre-opening checklist included
investigating everything from where to purchase coffee beans to
designing a logo, creating a menu and coming up with a building
design.

Start-up costs for the initial site, located just a few miles
from Pasadena's famed Rose Bowl, came to more than $100,000.
According to other operators, this is a modest investment for a
start-up drive-thru.

Just ask Caffino's Titterington. His sites run up to
$280,000 each before the doors--or windows--are even opened.

How can opening costs for a compact drive-thru location with a
limited menu equal the cost of opening a full-service restaurant?
Tit-terington explains that in California, as in many other states,
drive-thru coffeehouses must meet all restaurant codes, which
pushes up costs.

To keep costs in check, many drive-thru owners are setting up
shop in parking lots at shopping malls and strip centers. (Leasing
space in a parking lot is typically cheaper than leasing commercial
property.) Other
location hot spots are on major thoroughfares. A high-visibility
locale that's easy to get to and teeming with traffic is
crucial to drive-thru success.

Husband-and-wife team Meg Evans, 43, and Peter Lazare, 44,
positioned their Grab-a-Java drive-thru on a main street leading
into downtown Springfield, Illinois, a site that attracts morning
rush-hour traffic. "It's jammed in the morning," says
Evans, adding that traffic at the 21-foot-by-15-foot shop peaks at
about 7:30 a.m. and then simmers into a steady flow of java
junkies throughout the remainder of the day.

And lest would-be drive-thru coffeehouse owners think all coffee
consumers are trendy professionals who like their lattes half-caf
and low-fat, this trend actually appears to have gone mainstream.
Evans, who oversees daily operations at Grab-a-Java, says she and
Lazare, who still holds a full-time job as an economist, expected
the store to attract mainly young corporate types. To their
surprise, that hasn't been the case. "We get doctors,
government workers, housewives with children, students, carpenters,
nurses, everyone," says Evans. That mix of customers is
expected to boost first full-year sales to $150,000.

Talking Snack

Caffino, like most drive-thru coffeehouses, offers a pint-sized
menu of coffee drinks and baked goods. At most drive-thrus, the
selection resembles the upscale brews at more traditional
coffeehouses: cappuccino, cafe latte, cafe mocha, espresso, iced
coffee and, of course, standard drip coffee. Prices also fall into
the same range as those at coffeehouses such as Starbucks and The
Coffee Bean & Tea Leaf, with drip coffees going for about $1 to
$1.50 and specialty coffees commanding $2 to $3. Some drive-thrus
tack on a premium for the benefit of convenience.

Because of limited space and cooking facilities, many
drive-thrus limit food items to pastries and other baked goods such
as bagels, muffins, scones, cookies and biscotti. Grab-a-Java's
Evans tested a lunch menu but admits it didn't fly with
customers and was too time-intensive. She has since restricted the
food portion of the menu to bakery items.

Limited menus cut down on costs and on inventory, and
considering that drive-thru structures sometimes measure little
more than 100 square feet, inventory space is at a premium. In
fact, space for everything--including employees--is in demand.

At Gotta Java, eight employees split shifts, with three workers
on morning duty and two serving up the afternoon brew, while at
Grab-a-Java, only two employees assist Evans. Caffino averages 12
employees in addition to a manager and an assistant manager at each
location, bringing the company's total number of employees to
more than 300.

For many drive-thru operators, location speaks louder than
advertising. Aside from some local couponing, most coffeepreneurs
let their visibility do the talking. Like many local businesses,
drive-thrus typically rely heavily on word-of-mouth marketing. This
doesn't mean you can ignore other forms of marketing.
What's needed is a creative approach--distribute fliers in your
community announcing your grand opening, give customers a "buy
one, get one free" offer or create a "latte
Tuesday," when all lattes are reduced-price. While this may
not seem like traditional marketing, it doesn't require a big
outlay of cash, and it can encourage customers to buy more or try a
more expensive menu item.

Picking Up Steam

Drive-thru coffeehouses are just beginning to percolate. The
nation's coffee associations have yet to compile any statistics
on this new industry segment, and the Specialty Coffee Association
of America lists just 10 drive-thrus on its roster of more than
2,200 members nationwide.

However, the drive-thru trend is picking up speed, and even
giants like Starbucks are taking notice: The crown prince of coffee
has added drive-thru windows at a select few of its locations. The
real growth jolt, however, is expected to come from the independent
sector, not the established coffee chains. That means enterprising
java junkies who can serve up a quality cup of joe in a jiffy could
be on the fast track to coffeepreneurship.